I had a $7K credit line on my Wayfair Card (no balance) and received a new Comenity MasterCard in the mail. I hate to close a $7K credit line, but I don't see a lot of benefits in it.
My big question:
If I agree to open this new card, does it show as a new credit card in my credit report, or does it just look like the old account? I didn't want to apply for anything new or open any new accounts until this time next year, so I could get under 5/24 and apply for a Chase Sapphire Preferred.
Check with Comenity, very often these product changes and even upgrades from a store card to store branded Visa/MC are reflected as a new tradeline at the bureau.
It was based on credit criteria. Most banks that offer co-branded cards that are both closed-loop and open loop have differing lending criteria for each. I think Citi should have bought the portfolio--end of story. Not buying it and then forcing people to re-apply was really bad customer service on Wayfair's part. Ive sent 3 different emails/letters to Wayfair about this asking for a reason why or what their rationale was only to have each one not read/not answered or gotten some BS canned answer that doesn't address my question at all.
Since they wont answer my question or even said something to the effect of "unfortunately that inofrmation is propietary..etc," I won't be buying from WF anymore.
It's not clear that Wayfair had a choice particularly (we still don't know who initiated the Wayfair/Comenity divorce). And we also don't know if Citi wanted the portfolio but couldn't get it (or at the right price) or if they really had no interest for some reason (different underwriting standards and would rather require apps?)
Both Wayfair and Comenity told me that Wayfair cut ties with Comenity.
"Citigroup, which wrested the Costco card from American Express in 2016, similarly displaced Columbus, Ohio-based Alliance Data, a major provider of private-label cards that had previously offered a Wayfair card, according to a person with knowledge of the deal."
"Alliance Data Card Services maintains two banks to manage the funding and receivables for its clients' credit programs. In September 2012, the banks rebranded their names from WFNNB (World Financial Network [National] Bank) and WFCB (World Financial Capital Bank) to both operate under the Comenity name, as Comenity Bank and Comenity Capital Bank, respectively."
What typically happens is at deal renewal time (most deals are 5-10 years) either the bank or the retailer don't like the new deal or think the grass is greener elsewhere. If the retailer has rights to the portfolio (most do) they can sign with a new bank who will convert at least the open accounts as long as a price can be agreed to with the prior bank (the retailer is out of those negotiations). It is never a "cherry pick accounts" scenario so if there are too many bad/risky accounts in the portfolio they might not agree on a price so the accounts stay and either get closed or changed to a general purpose card. Comenity has had so many retail partners go under in the last couple of years they probably now have a process to pick the accounts that they believe (via some formula) to be profitable if switched to a general purpose card and the rest just get closed.
Comenity does not know. They refer you to the 3 credit bureaus in their FAQ
What typically happens is at deal renewal time (most deals are 5-10 years) either the bank or the retailer don't like the new deal or think the grass is greener elsewhere. If the retailer has rights to the portfolio (most do) they can sign with a new bank who will convert at least the open accounts as long as a price can be agreed to with the prior bank (the retailer is out of those negotiations).
What does the rights to the portfolio mean if the retailer cannot ensure that the new bank can convert the accounts (at least those that they want)? If the banks don't agree a price, what does the rights to the portfolio gain for the retailer?